United States District Court, N.D. Indiana, South Bend Division
OPINION AND ORDER
JON E. DEGUILIO JUDGE UNITED STATES DISTRICT COURT
This is an insurance coverage dispute between Defendant State Farm Fire and Casualty Company (“State Farm”) and Plaintiff Patricia Conley. Ms. Conley and her husband purchased a personal umbrella policy through State Farm in 2008. Two years later, she was in a serious car accident for which the other driver was found to be totally at fault. When her medical and other expenses exceeded those available under the at-fault driver’s underlying policy, she sought to recover under the uninsured/underinsured (“UIM”) portion of her umbrella policy. State Farm determined that Ms. Conley declined UIM coverage at the time she applied for the umbrella policy and did not pay Ms. Conley under the policy.
Ms. Conley responded by bringing this suit. She seeks a determination that the umbrella policy provided UIM coverage and additionally claims that State Farm breached its duty of good faith. [DE 1.] State Farm has moved for summary judgment on each of Ms. Conley’s claims. [DE 26.] The motion is fully briefed and ripe for decision. For the reasons stated below, the Motion for Summary Judgment is GRANTED IN PART and DENIED IN PART.
By 2008, Ms. Conley had been a long-term insured of State Farm. In March of that year, she approached her State Farm agent, Ryan Morris (an employee of A.D. Harris, State Farm Insurance), about obtaining a personal umbrella policy.
The parties disagree about nearly every aspect of the process through which Ms. Conley obtained her umbrella policy. Ms. Conley testified at deposition that her application was initiated through a short conversation with Sharon Hensley (another employee of A.D. Harris) in which she told Ms. Hensley she wanted a $1, 000, 000 umbrella policy. Mr. Morris returned Ms. Conley’s call and told her “he’d take care of it and [she] could sign the application the next time [she] was in the office.” [DE 36-1 at 7.] Ms. Conley stated that Mr. Morris did not discuss the availability of UIM coverage or ask any questions of her regarding her desire to obtain such coverage as part of the umbrella policy. [Id. at 7–8.] Mr. Morris claims to have explained the coverages available under the umbrella policy, including UIM coverage. [Id. at 18.] He testified at deposition that Ms. Conley orally indicated a desire to reject UIM coverage in the umbrella policy, but he could not recall the exact conversation in which that happened. [Id. at 17–18.] Ms. Conley denies making any statement indicating a desire to reject UIM coverage. The parties agree that Ms. Conley intended to complete the application the next time she visited the A.D. Harris office, where she regularly paid her premiums in person.
Ms. Conley completed the application in March 2008. Her account is that both Ms. Hensley and Mr. Morris were present when she arrived at the office. She entered Mr. Morris’s office, after which he handed her an application and told her “You have to sign this.” [DE 36-1 at 8.] Ms. Conley did sign the application, without reading it or having any discussion regarding the provision of UIM coverage, and handed Mr. Morris a money order to pay the policy premium. [Id.] She testified that there was no further conversation at that time and that Mr. Morris did not say anything about UIM coverage under the umbrella policy. [Id.] Mr. Morris denies being present at the office when Ms. Conley completed the application. [Id. at 17.] He claims that Ms. Hensley was the only person present at the office when Ms. Conley completed the application. [Id.] Ms. Hensley also testified at deposition that she alone was present when Ms. Conley completed the application and denied having had any conversation regarding UIM coverage at the time the application was completed. [Id. at 21–22.]
The bottom of the application for the umbrella policy contained the following language:
ACKNOWLEDGMENT OF COVERAGE REJECTION
Personal Liability Umbrella Policy Indiana Uninsured/Underinsured Motor Vehicle Coverage
Indiana law requires that an insurer shall make available in each automobile or motor vehicle liability policy coverage for the protection of persons insured who are legally entitled to recover damages from owners or operators of uninsured or underinsured motor vehicles because of bodily injury, sickness or disease, including death.
The term “uninsured motor vehicle” means a motor vehicle without liability insurance, a motor vehicle not in compliance with financial responsibility requirements, or a motor vehicle where the liability insurer in unable to make payment because of insolvency.
The term “underinsured motor vehicle” includes an insured motor vehicle where the limits of coverage available for payment under all bodily injury liability policies are less than the limits for your underinsured motorist coverage.
Any named insured has the right to reject Uninsured/Underinsured Motor Vehicle Coverage on behalf of all insureds.
□ I reject Uninsured/Underinsured Motor Vehicle Coverage on all vehicles; or
□ I reject Uninsured/Underinsured Motor Vehicle Coverage on ...